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Labor, coalition in cost of living battle

Paul Osborne, AAP Senior Political Writer

Labor and the coalition have traded blows over cost-of-living pressures as the government reintroduced its carbon tax repeal bills.

The government is adamant the repeal will improve the cost of living for average families by $550 a year and drive down electricity bills.

But Labor has seized on new economic modelling which shows budget changes to welfare and seniors payments will erode family budgets by thousands of dollars each year.

Prime Minister Tony Abbott intends to have the carbon tax repeal bills passed through the lower house this week, in time for a special four-day sitting of the new Senate from July 7.

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The government is quietly confident of securing six out of eight crossbench votes, including three Palmer United Party senators, to pass its legislation.

PUP leader Clive Palmer will outline at a media conference in Canberra on Wednesday night what it will take for his senators to back the bills.

"He will be fully transparent on Wednesday," his spokesman told AAP.

Mr Palmer also has concerns about pension cuts and the Medicare co-payment which he says will cost pensioners $2500 a year.

Environment Minister Greg Hunt on Monday seized on statements by energy retailers AGL, Origin and Energy Australia that prices would come down once the carbon tax was abolished.

"AGL today confirmed that price reductions will flow through to residential and small business customers if the carbon repeal legislation is passed by the federal parliament," the company said, adding the cuts would start from July 1 regardless of when the laws passed.

Mr Hunt said all six new senators had gone to an election promising to get rid of the carbon tax.

"All of the signs are that they will fulfil their commitment," he said.

Opposition Leader Bill Shorten in parliament referred to new modelling showing a couple on a single income of $65,000 with two children would be $1700 worse off in 2014/15 and short-changed by $6300 in 2017/18.

"Why should Australian families have to pay for the prime minister's dishonesty?" he asked Mr Abbott in parliament.

Mr Abbott told parliament Labor's family payments were unaffordable, but the government was still providing a generous system while getting the budget back under control.